The U.S. Bankruptcy Court approved the sale of the assets of
Wolf Camera to Ritz Camera on September 20 for $84.7 million. The
deal was expected to close by Oct. 1. Chuck Wolf will become vice
chairman of Ritz. Additional Wolf stores and Alpharetta
headquarters may be closed.
Kodak did not back the deal. Asked why, Joe Diliberto, Kodak GM and
Vice President, Photo Specialty, Consumer Imaging, said, "We are
committed to do what is in the best interest of our shareholders."
"we pursued other options to recover a part of our investment we
incurred as part of the bankruptcy filing."
As to the new Ritz-Wolf combination, he said, "Ritz is a Kodak
customer and we are always exploring new ways to work together with
our customers, which we will do."
A Fuji spokesman had no comment on the court's decision.

The combat between Kodak and Fuji is like a
fight between two heavyweights — one in yellow trunks, the
other green. The only difference is that it doesn't stop at the
15th round. Along with the Energizer Bunny, it keeps going and
going. Some of the rounds are just skirmishes, others are
mano-a-mano.
Two recent events have come together to escalate the conflict into
the Thriller in Manila category.
One involves Moto Photo who opened the bidding doors for its paper
business. The other is the still unresolved story of the June 21
Chapter 11 bankruptcy filing of Wolf Camera and the proposal to the
court that Ritz Camera step in and take over the Wolf operation for
$84.7 million. As I write this the Ritz offer is still before the
court and there are no other suitors. By the time you read this,
however, you will probably have learned from PMA Newsline the
conclusion of the court's decision. It looks as if Cousin Dave Ritz
might deliver the final coup de gr•ce to Cousin Chuck
Wolf.

Race for #1
There is no point in getting into too much detail. You've read all
about it from either Newsline or some other timely publication.
Renee DeGross of The Atlanta Journal-Constitution, Wolf's home city
newspaper, has done a great reporting job. I've drawn from some of
her material here.
The bottom line is that Chuck Wolf openly acknowledged that his
problems began when he decided to challenge Ritz for leadership in
the photo specialty arena. He wanted more store locations than
Ritz. He couldn't pass up the 450 Fox stores in 1998 from Kodak who
was most anxious to get out of the retail business. That package,
no doubt, set the stage for his future financial troubles. Hundreds
of the Fox stores were soon closed as it became apparent they were
under-performers. It was quickly apparent that Chuck went for the
deal due to the quantity of stores - not quality. He said that in
September, 1998 his firm went from 3,000 to 7,000 associates with
the stroke of a pen. He acknowledged to me that he knew by the end
of 1999 "we were in over our head."
Whatever the Fox deal was with Kodak it turned out to be not good
enough for Chuck and not so good for Kodak either. Some exec
probably got a plaque for getting rid of the Fox stores but Kodak
ended up having to take $75 million in write -offs this summer and
lead its best customer into financial ruin. Talk about shooting
oneself in the foot.
When I first spoke to Chuck after the announcement of the
bankruptcy filing I asked him if it were possible that he would get
together with Ritz. He said he was "looking at every option and
opportunity" and it was our "intent to go it alone."
At this writing the Wolf chain has been dwindled from a high of
almost 800 stores to about 420 locations with about 60 of these in
the Atlanta metro. Thirty eight Proex stores in the Minneapolis
market remain the jewel of the Wolf crown as I understand they are
strong contributors to the balance sheet.
A number of key folks have been severed along the way with
thousands of soldiers who had manned the now-closed sites. If the
Ritz deal goes through the large Wolf headquarters in Alpharetta
will probably be shut down as operations are melded into the Ritz
Beltsville, MD. facilities and more Wolf stores will be pared. An
Atlanta warehouse operation will probably continue.
David Ritz called Chuck Wolf "a master salesman" who, in the event
of the acquisition, would lead the firm's national sales
operations. For Chuck it would be a return to a firm where he had
been given his photo training by his uncle, Ed Ritz, and remained
until 1974 when he broke away to go on his own. Other top Wolf
execs are not so certain of their futures including Ted de Buhr
who, after the filing, was elevated from executive VP to President
and COO. Ted was previously president of Fox.